With IBM, you’re licensing at full-capacity if you don’t have ILMT

There is no downside to a licensing model where you only pay for what you’re actually using and have the ability to increase or decrease licensing. This is what makes the IBM sub-capacity licensing model so attractive.

The advantages of IBM’s sub-capacity licensing model are obvious, but the misinterpretations and misunderstanding of how to deploy sub-capacity happens frequently. In fact, I would say three out of five clients we work with start out saying they are using sub-capacity licensing when in reality they are using full-capacity licenses.

Your enterprise is always at full-capacity with IBM unless the appropriate steps are taken to change that status to sub-capacity IBM licensing. With few exceptions, IBM will consider an organization at full-capacity unless IBM License Metric Tool (ILMT) is implemented. What does this mean? If ILMT hasn’t been implemented, IBM doesn’t recognize your right to license at sub-capacity and will, in fact, view the organization’s license metrics as a full-capacity IBM licensing model. Under full-capacity licensing, you must license all active, physical processors in the server versus sub-capacity licensing where you pay for the virtual cores allocated.

The problem is, sub-capacity licensing has been the predominant issue in IBM software licensing compliance, leading to a greatly increased financial exposure for any organization not licensing correctly. And with IBM feeling the earnings pinch of late, it wouldn’t be surprising to see the company put an even greater emphasis on audits, meaning that if you’re going to pursue sub-capacity licensing, you better get it right.

The first thing to consider are existing assumptions, many of which may be incorrect. Software license rules are often complex and, in the cases where they are not, people have a tendency not to believe them. This applies to IBM licensing rules, where there has been and continues to be assumptions because “the other software vendors have the same rules” or “because my IBM rep would never steer me wrong.”

Unfortunately, assumptions do happen and the top three most common assumptions we hear are:

1. We automatically have sub-capacity licensing. This is indeed untrue unless your enterprise has followed steps to ensure sub-capacity licensing. Again, this assumption has been the chief issue found during audits.

2. ILMT sends the discovery report directly to IBM and IBM will know exactly what is going on in our enterprise. This is completely false. The report that is generated by ILMT goes directly and only to your company.

3. There is no need for sub-capacity because logical partitioning (LPAR) is present on my IBM hardware. This is a common notion because other software vendors do allow this type of partitioning to limit licensing. This is not true for IBM, even though it seems counter-intuitive.

True-ups are no longer true

IBM and a few other software vendors have a history of tolerating certain non-compliant areas of licensing and would simply true up licenses when a problem was discovered, but those days are long past. Post-audit shortfalls are not so easily resolved today. In fact, IBM’s audit can be a long and arduous process that lasts up to two years.

The kicker here is that it’s not IBM doing the audits. The audit responsibility is given to external, third party auditors. Any antagonistic relationship that might develop is therefor with the third party auditor, and possibly the IBM audit team, and not with your IBM sales rep, who is not directly involved in the audit and can do little during the process.

And while ILMT can help safeguard you during an audit, it isn’t as simple as downloading a discovery tool. The implementation can be confusing and unwieldy, requiring downloading table updates, verifying product bundling is performed correctly by ILMT, running reports, and ultimately signing off that the reports are correct and so on. Working with IBM support to fine-tune ILMT can also be time consuming.

With that said, it’s better than being surprised during an audit. The difference between licensing all activated processor cores in a physical server versus licensing only the virtual cores allocated can be big. Let’s say you have a pSeries server with 62 activated cores and only a single dedicated and capped LPAR with an entitled capacity of 0.2 running a particular IBM product such as DB2. Even after rounding up the micropartitioned LPAR, licensing 1 core of DB2 versus 62 cores is a huge difference. On a p770, for example, this difference could be as much as $2.9 million.

An ounce of prevention is worth a pound of cure. In the case of IBM’s sub-capacity versus full-capacity licensing, it’s absolutely true.

A senior Analyst at Miro Consulting, Inc., Trembley has assisted companies during IBM audits, migrations and optimization. With more than two decades of IBM license experience Miro Consulting specializes in software audit defense, contract negotiations and license optimization specifically for Oracle, Microsoft, IBM, and Adobe.

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